1. Application Submittal Procedures
Applicants seeking funding and project assistance from the WWDC and representatives from the WWDC, assigned to review the application and assist the applicant, shall comply with or address the following:
a. An application fee of one thousand dollars ($1,000.00) must be submitted with each application. The application fee shall be deposited into Water Development Account No. I. Acceptance of the fee does not obligate the WWDC or State of Wyoming to fund a study or provide construction funding for any proposed project or purpose. If the application is denied, then seventy-five percent (75%) of the application fee shall be refunded to the applicant. The authority to require an application fee is provided by W.S. 41-2-118(a)(xii).
b. A certified original of a resolution passed by the council or other governing body of the sponsoring entity shall be provided with an application for a Level II study or Level III construction project. If the applicant is in the process of forming a public entity, this requirement may be deferred until the formation process is completed. A public entity must be in place before the study or the construction project can commence.
c. The WWDO project manager assigned to review th application shall advise the applicant of the timetable for project review and evaluation.
d. The project sponsor shall be a public entity that can legally receive state funds, incur debt, generate revenues to repay a state loan, hold title and grant a minimum of a parity position mortgage on the existing water system and on the improvements appurtenant to the project or provide other, adequate security for the anticipated state construction loan.
e. For governing bodies representing special districts, e.g., improvement and service districts and water and sewer districts, that are responsible for water service to those rural subdivisions approved by Boards of County Commissioners on or after July 1, 1997, the Department of Environmental Quality's comments and recommendations filed pursuant to W.S. 18-05-306 must be submitted with the application.
f. To become eligible for funding, the WWDC shall require sponsor certification related to compliance pursuant to public water system rate requirements as set forth in W.S. 15-7-602 and W.S. 16-1-108.
2. Eligibility Criteria
The due date for project applications and application fees is September 15 of each year. The application must include a description of the project, a listing of available information pertinent to the project, and information describing the financial capabilities of the sponsor. A representative of the WWDC shall inspect the proposed project site. The WWDC shall develop their preliminary recommendations on new applications during their regular November meeting. The acceptance of the project application for incorporation into the program shall be based on the following criteria:
a. The proposed project must be consistent with the goals and objectives of the Rehabilitation Program as outlined in W.S. 39-6-305(k)(v) and these criteria.
b. The Rehabilitation Program must be the most appropriate source of funds for project study and construction.
c. There must not be any apparent economic, legal, environmental or technical problems that would impair or prohibit project development.
d. The project sponsor shall be a public entity that can legally receive funds, incur debt, generate revenues to repay a state loan, hold title and grant a minimum of a parity position mortgage on the existing water system and on improvements appurtenant to the project or provide other, adequate security for the anticipated state construction loan.
e. The proposed projects must serve twenty (20) or more municipal/domestic water taps and have installed an individual meter on each tap, 2,000 or more acres of irrigated crop land, or must rehabilitate watershed infrastructure, which will preserve the beneficial use of water in a watershed. The watershed rehabilitation projects must possess an estimated minimum useful life span of twenty-five (25) years and demonstrate that sufficient public benefits will accrue to justify construction of the anticipated improvements. If not, the project applicant shall be given the opportunity to make a formal presentation to the WWDC relative to that applicant's ability and willingness to pay for the project, the need for the project, the direct and indirect benefits of the project and any other information the applicant deems as reasons the project should be advanced or funded. The formal presentation shall be made at the WWDC's November meeting. However, if the request is denied or tabled, the sponsor may request that a public meeting be held in the project area to gather added information. in this case, the sponsor shall be provided the opportunity to make the formal presentation at the Commission's December/January meeting.
f. There shall be a comparison of the project area median family income to the state median household income as reported by the U.S. Bureau of Census and Department of Housing and Urban Development (HUD) and for municipal and rural/domestic type projects a comparison of the project area's average monthly utility rate to the monthly average utility rate for the state. This information shall be used in the ability and willingness to pay analysis and to assist in the determination of whether there is justification for the Commission to recommend a deviation from the loan/grant mix set forth in Chapter IV, Section 8 c. or from the interest rate set forth in Chapter IV, Section 8 d. below.
3. Recommendation Process
If the WWDC approves the project for inclusion in their recommendations to the Select Water Committee, a budget shall be developed to perform either a Level I or Level II study. For Level III construction projects the budget estimates compiled during the study process will be incorporated in the WWDC's reccomendations. These recommendations are included in the WWDC's annual legislative program that is subject to a series of internal, public, and legislative reviews. The WWDC prepares draft legislation, the Omnibus Water Bill - Planning, to appropriate funds to finance Level I and Level II studies and prepares draft legislation, the Omnibus Water Bill - Construction, to appropriate funds to finance Level III construction projects. The projects can commence, once the bills are approved by the legislature.
4. Level I Study Description
As rehabilitation projects are generally more well defined than new development projects, Level I studies shall be required only when there are numerous options to identify, compare, and evaluate or where there is not sufficient information for the sponsor to determine the benefits of forming a public entity. These studies are preliminary analyses and comparisons of development alternatives.
a. The typical Level I study shall identify or provide the following:
i. Development options.
ii. Potential project beneficiaries and the benefits each option could provide.
iii. Factors that could impair or prohibit the development of any identified option including legal constraints.
iv. An analysis of water rights including identification of conflicting prior rights.
v. Option comparisons based on physical and legal water availability, technical, economic, legal, and environmental considerations.
b. Level I Study Process and Considerations
These studies shall be performed in sufficient detail to identify which projects or project options, if any that, should be pursued. In evaluating projects that could be advanced to a Level II status, the following considerations shall be made:
i. Whether there is an opportunity to economically implement rehabilitation measures to maintain beneficial use of Wyoming's water;
ii. Whether there are viable solutions to resolve technical, legal and environmental problems; and
iii. Whether the sponsors is a public entity that can legally receive state funds, incur debt, generate revenues to retire that debt, possess title to the project and the existing system, provide security to repay state construction loans, and demonstrate operational and managerial capability.
c. After the Level I studies are completed, the WWDC shall initiate its review process to determine if the project should proceed to Level II. During its November meeting, the Commission shall review the findings of the report, consider the sponsor's input, and make its preliminary recommendations. The project sponsor shall be notified of the preliminary recommendation and will be given the opportunity to comment either through written correspondence or an oral presentation to the Commission at the November meeting. The Commission may choose to hold public meetings prior to its December/January meeting to obtain input for its final recommendation. At the December/January meeting, the Commission shall finalize its recommendation. If the recommendation is favorable, a budget shall be adopted and the project shall be included in the WWDC's recommended legislative program.
5. Level II Phase 1 Study Description
The typical Level II process consists of two phases which serve first to address project feasibility and then, if the project is determined feasible, to refine the project to the status necessary for a Level III funding request.
a. A Level II Phase 1 investigations shall provide the following:
i. A determination of existing water uses.
ii. A determination of technical feasibility including a safety analysis.
iii. A general configuration depicting preliminary physical characteristics of the improvements.
iv. A preliminary project operation plan.
v. Cost estimates for construction, consultant services, and operation and maintenance.
vi. Identification of direct benefits that result from the implementation of the improvements.
vii. A definition of economic, legal, environmental, and administrative problems and identification of alternate solutions to those problems.
viii. Identification of lands that may be affected by the improvements.
ix. An analysis of the project sponsor's ability to pay.
b. Once all Level II phase I investigation have been completed, the WWDC will evaluate the results and will also include the consideration of the sponsor's need for the project, interest in the project, and willingness and ability to financially participate in the project, to determine if the project should proceed to Level II Phase II.
6. Level II Phase 2 Study Description
a. A Level II Phase 2 investigations shall include the following activities:
i. An operating plan, which addresses water management during and after construction.
ii. A conceptual design determining the general configuration of the project.
iii. The identification of state and federal permits and clearances necessary to construct the project. Interview representatives of each permitting agency to determine data and schedule requirements.
iv. The performance of an environmental analysis of the proposed project operation and configuration.
v. The identification applications and appraisals needed to purchase or obtain easements on public lands or private lands;
vi. The development of a detailed schedule of the activities necessary to complete the project.
vii. The preparation of an itemized project budget which may includes costs for design engineering, permitting, environmental assessment, environmental impact statements, land acquisition, construction, construction engineering, operation, maintenance and replacement.
viii. The performance of an economic analysis identifying primary and secondary benefits.
7. Level III Approval Considerations
a. Projects shall not be elevated to Level III construction status unless the sponsor and state are committed to complete the project. Issues and questions that shall be considered and addressed in the development of Level III recommendations include but are not limited to:
i. Whether the project will result in the continued use of the existing water supply and whether the project will result in a more efficient use of the existing water supply;
ii. Whether the project will reduce a potential safety problem;
iii. Whether the project will reduce operation and maintenance costs;
iv. A determination of the total project costs and annual financial commitments required for the project and whether the project is affordable given the existing status of the water development account and prior commitments to the account;
v. Whether the project is a good investment for the State of Wyoming considering primary and secondary project benefits as well as the indirect benefits of keeping Wyoming's water at work for the benefits of its citizens;
vi. When all project costs are considered, including debt retirement, costs for consultant services and land acquisition, costs for mitigation of environmental impacts, and operation and maintenance costs, whether the project is economically feasible for the sponsor;
vii. Whether the applicants are a public entity that can receive state funds, incur debt, generate revenues to retire that debt, possess title to the project and the existing water system and provide security to repay anticipated state construction loans;
viii. Whethere the project sponsors and/or beneficiaries are willing to assume financial responsibility for the project. Whether the project sponsors understand the scope of the project. Whether the project will meet the sponsor's needs. Whether the project sponsors understand they are obligated to assure that the project must be designed and inspected by registered professionals; i.e. licensed engineers and geologists. If the sponsors wish to pursue construction using their own manpower and equipment, whether they understand the funding limits established by the state. Once construction is initiated, whether the project sponsor understand they cannot voluntarily abandon the project without repaying state grants and loans, including lost interest earning opportunities.
After the Level II report has been completed, the Commission shall begin evaluating the project to decide if the project should proceed to Level III construction status.
After other funding sources have been considered, the Water Development Program's per tap or per acre investment shall be compared to the sponsor's ability to pay. the project sponsors shall be given the option to make a formal presentation to the WWDC relative to that sponsor's ability and willingness to pay for the project if the Commission determines that the project should not advance due to high repayment costs. The need for the project, the direct and indirect benefits of the project, and any other information the sponsor deems, as reasons the project should be advanced or funded shall be included in the presentation. The formal presentation shall be made at the WWDC's November meeting. However, if the request is denied or tabled, the sponsor may request a public meeting to be held in the project area to gather added information. The sponsor shall then be provided the opportunity to address the Commission at the December/January meeting.
8. Level III Funding Considerations
At its November meeting, the Commission shall consider the project specific information, sponsor input, and develop its preliminary recommendations. If it is determined that the project should proceed to Level III, these preliminary recommendations shall address the following issues:
a. The project budget,which shall include costs associated with project permitting, design, land acquisition, construction engineering, and construction.
b. Level I and Level II Study Cost Sharing
The WWDC shall determine if the sponsor should be required to pay a portion of the Level I or Level II study costs incurred to develop the recommended alternative needed to secure funding for Level III construction. Typically, the WWDC is the lead agency in developing Level I and Level II reports. The Commission solely funds the studies to insure the reports are unbiased and performed in such a manner as to determine if the state should invest in the project. This procedure was also established because the project is better served if the sponsor uses its financial resources to fund their share of the project or to service the debt associated with the construction loan. However, in those exceptional cases where the sponsor assumes the role of lead agency in Level I and Level II studies, it shall share in the costs of those studies.
c. Financial Plan - Loan Grant Mix
The WWDC's preliminary grant recommendation shall be no more than fifty percent (50%) of the cost of Level III construction projects.
d. Financial Plan - Terms of the Loan
i. Statutory guidelines establish a minimum rate of four percent (4%) for program loans unless public benefits warrant a lower rate. The WWDC shall utilize the same interest rate as the State Lands and Investment Board. Those sponsors who feel a more favorable interest rate is warranted due to a limited ability to pay must make a formal presentation to the WWDC documenting their case. Sponsors electing to pursue this option shall be made aware that the WWDC is reluctant to deviate from this interest rate and such requests shall be denied unless they are clearly documented and justified.
ii. W.S. 41-2-121 specifies the term of the loans cannot exceed fifty years after substantial completion of the project. Further, the term of the loan shall never exceed the economic life of the improvements. The sponsor's method of loan repayment (water rates, taxes, bonds) shall also be considered in establishing the term of the loan.
iii. The statutes allow the WWDC to recommend that the payment of interest and principal be deferred up to five years after substantial completion of the project. This special condition shall be granted only on a limited basis. The sponsor's method of repayment and longevity as a public entity shall be key considerations in determining if this deferment should be granted. In no event can the deferment and term of the loan exceed fifty years.
9. Notification and Hearing process
After the November meeting, the project sponsor shall be notified of the WWDC's preliminary recommendation. A public hearing shall be held at which time a description of the project and the WWDC's preliminary recommendation shall be presented for the purpose of obtaining public input. Verbal and written comments read into the record during the public hearing, shall be considered by the WWDC during their December meeting. Project sponsors shall be given the opportunity to formally present its input to the WWDC, either through correspondence or a presentation at the meeting. After the WWDC has finalized its recommendation and if the recommendation is favorable to the project, it shall be included in the WWDC's annual proposed legislative program.
10. Level III Construction Activities
The following activities must be addressed once the legislature appropriates funds to construct the project:
a. The project agreement, note and mortgage which formalizes sponsor and WWDC project responsibilities and the financing procedures, shall be the first activity undertaken. Funds cannot be committed for expenditure until these documents are executed. For those projects where the sponsors wish to pusue construction using their own manpower and equipment, the project agreement shall reflect that funding is only available to pay the cost of invoiced material. Permit and easement acquisition and retaining labor, equipment and professional services are the obligation of the sponsor.
b. For project that are funded through a combination of funding sources, the sponsors shall certify that all funding has been secured and is available for project purposes before construction can commence.
c. Professional services required for final design, permitting and construction engineering shall be secured pursuant to the requirements of the State Board of Engineers and Surveyors, Board of Registration for Professional Geologists, and state procurement statutes.
d. Permit applications shall be prepared to secure all necessary construction permits and approvals.
e. The construction documents including technical specifications, contract documents and bidding plans shall be prepared. This work may be performed concurrently with the permitting process if it doesn't adversely impact project feasibility.
f. Easements or fee titles necessary to construct the project shall be acquired. The scheduling of this task shall be sequenced to minimize impacts to property owners and to expeditiously construct the project.
g. Mitigation of project impacts on cultural resources shall be undertaken.
h. After the above activities are completed or there is assurance that they will be completed prior to the occurence of any construction activities, the construction bidding process can be initiated.
i. Construction shall commence and construction administration/inspection initiated upon the acceptance of the bid and upon the issuance of the notice to proceed.
j. The date project benefits accrue to the sponsor, for purposes of triggering loan repayment schedules shall be determined by the Commission.
k. Construction shall commence and construction administration/inspection initiated upon the acceptance of the bid adn upon the issuance of the notice to proceed.
l. Once compliance with regulatory permitting conditions has been achieved and reclamation and mitigation activities have been completed, project close out procedures may be initiated.
11. Legislative Process and Program Exclusions
Before rehabilitation funds can be allocated by the WWDC to any particular project, the Governor and Legislature must approve the WWDC recommendations. These approvals are achieved in the same manner as the New Development Program.
a. Rehabilitation Program Exclusions
In order to further clarify the list defined under program priorities, the following are examples of projects/investments that shall not be made under the program:
i. Refinancing of Previously Completed Improvements -- Refinancing of existing projects that have been financed with non-state resources is not an allowable program expense. Further, refinancing may conflict with goals and objectives of other programs. However, the Commission may consider refinancing eligible projects which have acquired temporary or emergency funding from the State Land and Investment Board.
ii. Wastewater Projects -- Wastewater treatment plants and/or collector systems do not meet program criteria.
iii. Environmental Enhancement -- Although the feasibility of providing environmental improvements shall be considered on all program projects, the program does not have the resources to pursue projects that solely serve environmental enhancement purposes. There are other state and federal agencies that have the authority and funding to pursue these projects.
iv. Flood Control -- Projects that deal solely with flood control is essential in many parts of the state. There are active federal funding programs that serve this purpose. Therefore, sponsors are encouraged to seek funding from these alternate sources.
v. Hydropower Projects -- Existing hydropower facilities should be generating sufficient revenues to perform operation, maintenance, and replacement wihtout state assistance.
vi. Erosion Control -- While improvements to natural streams are sometimes necessary to keep existing water supplies viable, these improvements are typically performed through private or federal funding.
vii. Distribution Systems -- For purposes of program implementation, distribution systems are considered to be those facilities whose primary purpose is to deliver water to individual users. There is alternate financing available for these improvements to distribution systems through other state and federal programs.
viii. Water Treatment Facilities -- Historically, the program has not participated in water treatment projects. While the need for improvements to treatment facilities has been considered in the generation of financing plans for program rehabilitation projects, the funding for water treatment improvements has been considered the responsibility of the sponsor. However, the Legislature enacted W.S. 16-1-301 which authorizes the use of water development funds to match federal funds to address Safe Drinking Water Act compliance issues. This matching grant program is titled the "Drinking Water State Revolving Fund." It is a permanent revolving loan fund that is not included in the annual appropriations described in the omnibus water bills.
Operating Criteria Table of Contents
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